Managerial Accounting: Creating Value in a Dynamic Business Environment
12th Edition
ISBN: 9781260417074
Author: HILTON, Ronald
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Question
Chapter 15, Problem 1RQ
To determine
Comment on the given statement.
Expert Solution & Answer
Explanation of Solution
Pricing decisions: Pricing decisions is one of the most important and required decision for the management. Pricing decisions has to be made after considering the number and variety of factors.
Every firm has to price its product higher than the product cost in a long run. But cost can be ignored, if the market for the product also is critically important for pricing the banking services.
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Students have asked these similar questions
Which of the following is a reason that banks may favor fee compensation over balance compensation?
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Balance compensation is not as visible as fees for budgeting purposes.
The strategy involves attracting deposits to fund their loans.
Earning credits used to determine the value of collected balances are taxable.
Deposit balances increase liabilities on the balance sheet.
A bank that grants loans to firms in a many different lines of business:Â
will increase its information cost and decrease its credit risk
will increase both its information cost and its credit risk
will decrease its information cost and decerase its credit risk
will decrease its information costs and increase its credit risk
Does its management typically have complete control over a firm’s credit policy? As a general rule,is it more likely that a company would increase itsprofitability if it tightened or loosened its creditpolicy?
Chapter 15 Solutions
Managerial Accounting: Creating Value in a Dynamic Business Environment
Ch. 15 - Prob. 1RQCh. 15 - Prob. 2RQCh. 15 - List and briefly describe four major influences on...Ch. 15 - Prob. 4RQCh. 15 - Prob. 5RQCh. 15 - Prob. 6RQCh. 15 - Define the following terms: total revenue,...Ch. 15 - Prob. 8RQCh. 15 - Prob. 9RQCh. 15 - Prob. 10RQ
Ch. 15 - Prob. 11RQCh. 15 - List the four common cost bases used in cost-plus...Ch. 15 - List four reasons often cited for the widespread...Ch. 15 - What is the primary disadvantage of basing the...Ch. 15 - Prob. 15RQCh. 15 - Prob. 16RQCh. 15 - Prob. 17RQCh. 15 - Explain the phrase price-led costing.Ch. 15 - Prob. 19RQCh. 15 - Prob. 20RQCh. 15 - Could tear-down methods be used effectively for...Ch. 15 - Briefly describe the time-and-material pricing...Ch. 15 - Explain the importance of the excess-capacity...Ch. 15 - Prob. 24RQCh. 15 - Describe the following approaches to pricing new...Ch. 15 - Prob. 26RQCh. 15 - Briefly explain the potential negative...Ch. 15 - Prob. 28ECh. 15 - Prob. 29ECh. 15 - Prob. 30ECh. 15 - The marginal cost, marginal revenue, and demand...Ch. 15 - Prob. 32ECh. 15 - Refer to the cost and production data for the Wave...Ch. 15 - Prob. 35ECh. 15 - The following data pertain to Royal Lighting...Ch. 15 - Prob. 37ECh. 15 - Badger Valve and Fitting Company, located in...Ch. 15 - North American Pharmaceuticals, Inc. specializes...Ch. 15 - MPE, Inc. will soon enter a very competitive...Ch. 15 - Prob. 41PCh. 15 - Prob. 42PCh. 15 - Prob. 43PCh. 15 - Alexis Kunselman, president of Pharsalia...Ch. 15 - Southern Tier Heating, Inc. installs heating...Ch. 15 - Omaha Synthetic Fibers Inc. specializes in the...Ch. 15 - Prob. 47PCh. 15 - Prob. 48CCh. 15 - Zylar Industries is a manufacturer of standard and...
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Similar questions
- If the bank decides to cut down on interest expenses by reducing its dependence upon borrowed funds, what policy must the bank follow?arrow_forwardIn your opinion, what is the effect of the banking sector clean up on investment decisions of individuals/firms.arrow_forwardIf a bank's credit ratings decrease, How does this affect borrowers, lenders, and financial institutions? What are the implications of this downgrade to the health of the financial system?arrow_forward
- Do you think that removing the impediments to anationwide banking system will be beneficial to the economy? Explain.arrow_forwardHow does data bias influence the culture of ethics and profitability in the financial services sector? How do you mitigate possible negative effects on the potential consumer of financial services in banking?arrow_forwardDefine Gearing and explain its advantages and disadvantages. Why might a bank be interested in a company’s level of gearing?arrow_forward
- Discuss the potential market failure in the diamond model of banking regulationsarrow_forwardWhy do financial regulators have a significant impact on banks?arrow_forwardWhich of the following statements is false? A.  Moral hazard is the lack of incentive to guard against risk where one is protected from its consequences.  B.  Information about a bank’s activities and financial performance is available in the bank’s financial statements.  C.  As long as everyone continues to accept the paper bills in exchange, they will have value and serve as currency.  D.  To an economist, money is the stock of assets that can be readily used to make transactions.arrow_forward
- Which of the following is a reason for financial regulation? a. To ensure market dominance by strong financial institutions. b. The failure of any financial institution may have a serious negative impact on individuals and economies. c. Banks cannot be trusted. d. To ensure government control of the economy.arrow_forwardWhich statement is incorrect? Â a. Information and transaction costs related to financial market transactions would be higher if there is no participation of financial intermediaries. b. The common trait of savings banks, commercial banks, credit unions and savings and loan associations is that all of them accept deposits from SSUs and provide credit to DSUs through loans and purchases of securities. c. Finance companies act as a factor by purchasing a firm's receivables at a discount and subsequently processing and collecting the balances of these accounts. d. A lending company operating in the Philippines cannot charge more than 12% annual interest on the loans it grants to borrowers. e. none of the abovearrow_forwardWays that banks compete for customersarrow_forward
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